Posts Tagged ‘ford russia’

Ford has failed to gain traction in Japan, a situation worsened by the country's economic woes.

Ford Motor Co. says it will shutter its operations in both Japan and Indonesia after years of struggling to crack open a market that has largely rejected foreign brands.

The Detroit automaker plans to shut down its dealerships and end imports of both Ford and Lincoln products, Dave Schoch, the president of Ford’s Asia Pacific region advised employees in an email sent out on Monday.

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The move follows the glum conclusion that there is “no reasonable path to profitability,” Schoch stated, adding that, “Unfortunately, this also means that our team members based in Japan and Indonesia will no longer work for Ford Japan or Ford Indonesia following the closures.”

Ford is hunkering down for the long haul in Russia while GM is cutting back its operations while the market there continues its free fall.

Facing the prospect of a collapsing local market, Ford Motor Co. is looking with increased desperation for ways to keep its Russian assembly plants busy. It hopes to avoid the same fate as rival General Motors, which has chosen to all but abandon the Russian market entirely.

The heart of the former Soviet Union has seen its car market plunge by 30% since the beginning of this year as Western sanctions have taken hold. And that’s on top of the sharp decline Russia experienced in 2014, sales now running barely half the market’s one-time peak of around 3 million vehicles a year.

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But Russia isn’t alone. In fact, only India has continued to maintain solid, positive momentum among the so-called BRIC countries — which also include Brazil, India and China — the most promising emerging markets that were supposed to deliver most of the growth for the global auto industry in the years ahead. (more…)

Sales have been slow at showrooms, like Moscow's Major mega-dealer, with little prospect for a quick turnaround.

On the heels of General Motors’ decision to pull up stakes in Russia, the country’s auto sales continued its dramatic descent in April dropping 41.5% despite the country subsidizing its auto loans.

According to the Association of European Businesses, the country sold 132,456 cars and commercial vehicles last month. The only upside for the country is that the top 10 sellers were all Russian carmakers.

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The result was a small improvement over the 42.5% loss in March. Year-to-date sales are 516,135 units: down 37.7%. (more…)

The Datsun on-DO is the brand's first offering in Russia. It is a four-door, five-seat family sedan.

Despite a slowdown and sales, cuts in production and the political crisis in the Ukraine, global automakers are still moving ahead with plans to expand in Russia, which could become Europe’s largest single market before the end of the decade.

Russian sales dropped 5% last year and are expected to shrink further this year despite the pent up demand for new vehicles in European Russia. At the same, though, Nissan has moved forward with sales in Russia of its Datsun brand, which is aimed at the lower range of the market.

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Global automakers appear to be willing to look beyond Russia’s role in the messy political upheaval in the Ukraine as they continue to expand in Russia, which is expected to emerge as the largest automotive market in Europe well before the end of the decade. (more…)

Workers on the line at the Ford plant in St. Petersburg, where 700 jobs are being cut.

The temperature might finally be warming up after the frigid Russian winter, but the country’s auto industry is suddenly feeling a big chill.

Russia has been the target of increasing sanctions in the wake of its disputed annexation of Ukraine’s Crimean Peninsula and the threat that Russian President Vladimir Putin might send troops into the neighboring country in an expanded land grab. That has led to a flood of capital leaving the country and signs that the crisis could strike hard the Russian economy.

The crisis is causing “uncertainty in the marketplace,” warns consulting firm Accenture.

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Ford sent a chilling signal this week when it announced plans to trim 950 jobs at its two Russian plants, including 700 full-timers at its primary facility in St. Petersburg – almost one in five of its employees in the country. The maker is blaming an already weak economy, as well as the weak Russian ruble, but observers warn that this could be just the first sign of a serious setback for the country’s auto industry – especially if the Ukrainian crisis drags on, or rose, escalates.

General Motors is planning to invest more than $1 billion in Russia over the next five years, said James Bovenzi, managing director of GM Russia and CIS, and it expects production, including production by its joint venture partners, to double from 232,000 units in 2010 to more than 520,000 units in 2015.

But the maker doesn’t want to do it alone. GM wants its traditional supply network to follow along. And so do Ford, which sees significant growth potential of its own in Russia.

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“The reason we are there is we see opportunity,” Bovenzi said during a dinner meeting arranged by the U.S.-Russia Business Council to encourage American automotive suppliers to consider investments in Russia.

“There is a lot of pent-up demand in Russia” he noted. “The average vehicle is more than 10 years old. The middle class is growing and nine of the 10 best-selling cars in Russia are foreign brands,” noted Bovenzi, adding GM’s Chevrolet brand was a top seller.

Sollers says "Da," to Ford, opening the door to an expanded presence in Russia.

Eager to expand sales in emerging markets, Ford Motor Co. has announced a 50/50 joint venture with Sollers, one of Russia’s leading automotive companies.

New of the proposed deal — which will involve the production and distribution of Ford passenger cars and light-duty commercial vehicles – followed shortly after Sollers announced it would not complete a partnership under negotiations with the Italian automaker, Fiat SpA.

“We are delighted to be taking this next step for Ford, in Russia, with our proposed partner, Sollers,” said Stephen Odell, chairman and CEO, Ford of Europe.

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“This is a great opportunity, and will provide Ford customers in Russia with more products and better service,” said Odell, adding “It also will help to strengthen the Russian automotive industry and its local supply base.”

In 2002, Ford became the first foreign auto manufacturer to start producing cars in Russia, and since then it has built a solid base in the country. But the joint venture with Sollers reflects a broader industry trend.